• by Ray Schultz , Columnist, January 3, 2023

There seem to be two classes of small- and medium-sized businesses (SMBs): The fast-growers and those that are slower in getting off the ground.  

What makes them different? For one thing, SMBs with revenue growth of 10% or more steadily adjust what they do. This resulted in more than 90% being on track to hit their sales and profit targets, according to Turning Business Insight into Action, a study by Brightflow.ai.  

Specifically, 53% of fast-growers are investing in new technology, versus 39% of their slow-growth counterparts.  

In addition, 51% of the fast-track firms are innovating to create new products and diversifying their offerings, while only 31% of slower companies are doing so. 

And, 36% of the fast-growers are building customer service loyalty capabilities. Here the numbers are tighter — 31% of the slow-growth respondents say the same. 

Moreover, 52% of the fast companies use an integrated software suite that includes sales forecasting features.

In fact, 80% say they have the data they need for smooth cash flow, while 33% of the slow-pokes struggle with this task. And, more that 33% of fast growers have the information they need to accurately forecast sales — 64% more than the number of slower companies.

Their biggest challenges overall? SMBs cite these issues:

• Rising cost of goods and services — 56%
• Forecasting supply and inventory needs — 40%
• Staffing — 39%
• Demand generation and customer acquisition — 37%
• Accurate sales forecasting — 36% 

SMBs sometimes have to make tough decisions. Case in point: 40% of fast companies have cut their ad spending—by an average of 42%. These firms saw an increase in profitability.  

This allowed one personal care/beauty ecommerce company with more than 100 employees to “use the money for other parts of the business.” 

Of the fast-growth SMBs that made changes to their inventory, 51% eliminated some items completely and this helped make them more profitable. 

Brightflow.ai surveyed executives at 200 SMBs.  

The full study can be accessed here.